Diesel Prices Hit Record High Amid Global Supply Tightness
The United States Energy Information Administration (EIA) has published an analysis of diesel prices, noting that as of September 14th, retail diesel prices averaged $6.29 per gallon in the US.
This price is not only the highest on record since EIA started publishing its analyses in 1994 but also the highest on an inflation-adjusted basis since 2022.
The EIA analysis identifies several factors that contribute to diesel prices, including the cost of crude oil, retail margins, distribution costs, taxes, and crack spreads. Crack spreads are indicators of refinery profitability and are used as a proxy for refinery margins.
In particular, the high crack spread for diesel, combined with elevated crude oil prices, has driven up retail prices. Global distillate fuel supplies are tight due to reduced refining activity in countries such as Russia, China, and parts of the Middle East.